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The zones of discrimination for M-Score is as such:
An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.
During the past 11 years, the highest Beneish M-Score of Pampa Energia SA was 2.79. The lowest was -6.44. And the median was -2.93.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.
The M-Score Variables:
The M-score of Pampa Energia SA for today is based on a combination of the following eight different indices:
|M||=||-4.84||+||0.92 * DSRI||+||0.528 * GMI||+||0.404 * AQI||+||0.892 * SGI||+||0.115 * DEPI|
|=||-4.84||+||0.92 * 1.4085||+||0.528 * 0.1276||+||0.404 * 1.0729||+||0.892 * 1.1774||+||0.115 * 0.7246|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2493||+||4.679 * -0.1224||-||0.327 * 0.882|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $392.1 Mil.|
Revenue was 200.88 + 194.274057143 + 189.941714286 + 185.2912 = $770.4 Mil.
Gross Profit was -0.525714285714 + 14.0118857143 + 2.01954285714 + 5.50182857143 = $21.0 Mil.
Total Current Assets was $676.0 Mil.
Total Assets was $2,368.1 Mil.
Property, Plant and Equipment(Net PPE) was $1,265.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $68.7 Mil.
Selling, General & Admin. Expense(SGA) was $194.7 Mil.
Total Current Liabilities was $903.4 Mil.
Long-Term Debt was $457.5 Mil.
Net Income was 6.98285714286 + 103.0792 + 83.1973714286 + 10.9253714286 = $204.2 Mil.
Non Operating Income was -23.2914285714 + 61.9629714286 + 16.5224 + 49.3179428571 = $104.5 Mil.
Cash Flow from Operations was 0 + 90.5225142857 + 73.7980571429 + 225.1688 = $389.5 Mil.
|Accounts Receivable was $236.4 Mil.
Revenue was 170.274285714 + 163.589371429 + 157.287314286 + 163.161714286 = $654.3 Mil.
Gross Profit was -0.628571428571 + 12.9084571429 + -7.20422857143 + -2.79965714286 = $2.3 Mil.
Total Current Assets was $486.9 Mil.
Total Assets was $1,639.6 Mil.
Property, Plant and Equipment(Net PPE) was $877.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $34.0 Mil.
Selling, General & Admin. Expense(SGA) was $132.4 Mil.
Total Current Liabilities was $669.5 Mil.
Long-Term Debt was $398.8 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(392.08 / 770.386971429)||/||(236.430971429 / 654.312685714)|
2. GMI = Gross Margin Index
Measured as the ratio of gross margin in year t-1 to gross margin in year t.
Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(14.0118857143 / 654.312685714)||/||(-0.525714285714 / 770.386971429)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (675.954285714 + 1265.55428571) / 2368.11428571)||/||(1 - (486.860342857 + 877.478057143) / 1639.63142857)|
4. SGI = Sales Growth Index
Ratio of sales in year t to sales in year t-1.
Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.
5. DEPI = Depreciation Index
Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.
DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.
|DEPI||=||(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))||/||(Depreciation_t / (Depreciaton_t + PPE_t))|
|=||(33.9974857143 / (33.9974857143 + 877.478057143))||/||(68.6785142857 / (68.6785142857 + 1265.55428571))|
6. SGAI = Sales, General and Administrative expenses Index
The ratio of SGA expenses in year t relative to year t-1.
SGA expenses index > 1 means that the company is becoming less efficient in generate sales.
|SGAI||=||(SGA_t / Sales_t)||/||(SGA_t-1 /Sales_t-1)|
|=||(194.676114286 / 770.386971429)||/||(132.3512 / 654.312685714)|
7. LVGI = Leverage Index
The ratio of total debt to total assets in year t relative to yeat t-1.
An LVGI > 1 indicates an increase$sgai= in leverage
|LVGI||=||((LTD_t + CurrentLiabilities_t) / TotalAssets_t)||/||((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)|
|=||((457.462857143 + 903.394285714) / 2368.11428571)||/||((398.849485714 + 669.4888) / 1639.63142857)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(204.1848 - 104.511885714||-||389.489371429)||/||2368.11428571|
An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.
Pampa Energia SA has a M-score of -2.99 suggests that the company will not be a manipulator.
Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations
Pampa Energia SA Annual Data
Pampa Energia SA Quarterly Data